How to Invest Private Money in Real Estate Investments
By Lincy Stewart
Investing private money in real estate can be a good business proposition but the challenge is finding private money. You will have to identify and create a pool of resourceful people who are in a position to provide you money.
To succeed in your efforts to obtain private money, you should evolve a workable business plan setting out your investing strategy and techniques, the quantum of money needed, the estimated profits, and the timetable for repayment.
You should thereafter prepare a list of prospective investors that should include your circle of relatives, friends, and acquaintances. Do not pre-judge and omit names of people whom you think may not be able to help. Please know that even people who have no money may have access to potential investors.
Once the list is complete, contact each one of them with a well-drafted personal letter explaining the type of real estate investing and what returns they can expect. Convince people about this attractive as well as secure form of investment and explain to them exactly how you propose investing, how their money will be secured by the real estate, and what their payback time frame will be.
The next obvious step in the process of expanding your pool of private money lenders for real estate investing is to contact those you do not know. One of the most effective ways to do this is through holding free seminars. You will be surprised that by conducting free seminars, you will probably find more money than you may actually need. If you think speaking to a large group is scary, you can develop your presentation and engage professional speakers who will competently do the job.
Apart from a PowerPoint presentation, you can hand over well-designed pamphlets. Ponder over the logical manner of spreading your information, and deliver it to your prospects in a simple and unambiguous language that will make sense to them. Do not attempt to forcibly sell your concept but merely make things informative.
Intensify your efforts using a variety of publicity materials like flyers, press ads, direct mail and whatever it takes to get the word out. When holding a seminar, make it a point to record the contact particulars of people coming as this will be needed for follow-up calls. You can also immediately shoot out a 'Thank you' letter to each of the attendees.
Build a team of people who choose to work with you and this will become part of your real estate investing team. If you follow these steps, you will soon be far ahead of the other real estate investors in your area in mobilizing private money.
Please know that investors seeking alternatives to the stock and other money markets will be open to the idea of private money loan investing. If you are diligent and work to a plan, you can earn solid returns both for yourself and your private money investors with minimal risk.
The only right thing to do is forge a healthy working relationship with your private money investors. They should feel safe and comfortable being with you and trust you with their money. Rely on professionals for advice, but make decisions yourself after careful research and analysis.
Hi, I am Lincy working for RE Mentor. We offer a different perspective on apartment investing through real estate coaching - showing people how to start making money in real estate. Visit us at real estate investments.